Phosphatidylinositol polyphosphates (PPIs) have recently emerged as key regulators of membrane trafficking pathways. PPIs transiently appear at specific membranes at specific times. However, how their transient appearance is regulated, and the roles that these molecules play in membrane traffic and other events are not well understood. Phosphatidylinositol (3,5)-bisphosphate (PI3, 5P2) is found in all eukaryotes, from yeast to humans. Its roles are confined to the late endosomal and lysosomal membranes. Yeast mutants unable to synthesize this lipid are defective in vacuole inheritance and retrograde traffic from the vacuole (lysosome). The primary defect is due to an inability to form vesicles or tubules from the vacuole membrane. PI3, 5P2 is generated from PI3P by the kinase Fab1p. In yeast, PI3, 5P2 levels are18-28 fold lower than the other PPIs. However, within minutes of exposure to hyperosmotic stress, PI3, 5P2 levels rise more than 20-fold and then by 30 min return to basal levels. This dramatic response suggests that PI3, 5P2 is part of a signal transduction pathway that protects yeast from osmotic stress. Vacuole volume strictly correlates both with PI3, 5P2 levels and with changes in osmolarity of the media. The elevation in PI3, 5P2 may prevent vacuole lysis by regulating selected ion transporters and by regulating vacuole volume via membrane trafficking. Our goals are to determine the functions and regulation of PI3, 5P2. Three activators of yeast Fab1p have recently been discovered. Moreover, human cDNAs with high sequence similarity to two of these activators have been identified and sequenced. This suggests that the mechanism of PI3, 5P2 synthesis, and its acute regulation, are conserved from yeast to humans. PI3, 5P2 in humans may regulate both normal lysosomal function and also specialized membrane trafficking pathways. Of particular note are studies suggesting a role for PI3, 5P2 in glucose homeostasis. Our specific aims are to: 1) Use yeast to determine the mechanism for the transient elevation of PI3, 5P2 levels. 2) Determine the spatial regulation of PI3P and PI3, 5P2 synthesis. 3) Determine the downstream targets of PI3, SP2. 4) Determine the roles of PI3, 5P2 in mammalian cells.